EBanking

Dr. Rana Singh

Associate Professor
www.ranasingh.org
Agenda
EBanking - Concepts and advantages
Technical Framework
!ndian Banking Scenario
!C!C! !nfinity" A Case Study
A nonresident !ndian (NR!) in Paris has an easy way
to access money in this fashion capital of the world.
His Citibank account in !ndia can be accessed through
an ATN in Paris, which in turn transmits information
to Citibank`s central hub in the US.
The !ndian rupees are converted to US dollars, which
are in turn converted into French Francs at the
current exchange rate, the !ndian account is debited
and the Francs made available to the NR!.
elcome to the era of technology banking!
!magine a Scenario
Definition
EBanking
is an umbrella term for the process by
which a customer may perform banking
transactions electronically without visiting a
brickandmortar institution.
hat is Ebanking?
"nline banking or !nternet banking
!n simple terms it does not involve any physical
exchange of money, but it`s all done
electronically, from one account to another, using
the !nternet.
From a personal computer, you can access your
bank account information, and perform many
banking functions, like transferring money,
making a loan payment
hat is Ebanking?
"nce you register yourself on a bank website, you
can view
o Your accounts, credit card S home loan balances
o Accrued interest, fees and taxes
o Transaction details of each account
o Pay bills
o Transfer funds to third party accounts which you
nominate
o "pen a deposit right from the terminal you are sitting at.
hat is Ebanking?
However, till now !nternet services in !ndia only
allows for a minimum level of interactivity such as
o Answering email queries
o Feedback forms
o Articles asking for readers' opinion at the end
An accountholder, armed with a password, can
use the Net to order a cheque book, stop payment
of a cheque and spot the balance and individual
operations in the account and transfer funds.
Advantages
Eliminates the use of paper and replaces it
with computer screens
No need to stand in line at the bank,
because all you have to do is log onto the
internet S access your account
!t's safe, hassle free, saves hours of time a
month
Advantages
!t comes with a world of other benefits
o !nterest earning checking accounts,
o Automatic bill payment
o ATN/Debit cards
o Credit Cards
o Direct Deposit
o "nline Statements
o Loans
o Noney market accounts
'ransaction costs
Source : Booz ,Allen and Hamilton
stomer service
As an online bank customer, you have a
website that is at your disposal 24/7
You can get your online statement for
the month, week, day, or year
You can send emails with questions or
concerns
You can pay bills
E Banking Set7
Elements of an E Banking
System
Hardware
o Servers
o Storage device and database
o Communication channels and lines
o Cateways and remotely located devices
(e.g., thin clients or !nternet appliances)
serving as interfaces between users and
computers
Software
Elements of an E Banking
System
o "perating systems
o Firewalls
o Database management systems
o Security application programs.
E Banking Set7
Areas Of Secrity
Authentication
o verifying your identity using
passwords/pass phrases and certificates
Confidentiality
Non Repudiation
o Nethod by which the sender of data is
provided with proof of delivery and the
recipient is assured of the senders identity
Areas Of Secrity
!ntegrity
Access Control
o Nechanisms and policies that restrict
access to computer resources
Availability
Access ontrol
Access control restricts the flow of data
traffic
!nternet Banking uses firewalls in the
area of access control.
!nternet Banking two firewalls are used
o "ne before the !nternet Banking server
o Before the SQL database
Access ontrol
Banking uses firewall which fall into two
categories
o Packetfiltering Cateways
o Proxy services.
Data 'ransmission and
onfidentiality
Public Key Encryption
Secure Socket Layer (SSL)
Athentication
Digital ertificate
o A digital certificate is an electronic !D, which is
verified by a third party, a certification authority
(CA)
o The CA controls the Public Key !nfrastructure
(PK!).
o A security certificate ,associates an identity with a
public key. "nly the owner knows the
corresponding private key that allows the owner
to decrypt or make a digital signature.
o Eg Barclays UK's Digital certificate
EBanking Scenario
Ebanking 'rends orldwide
Concept of Ebanking is more prevalent in the
technologically developed parts of the world
such as Europe and the US
The number of online banks in Western
Europe has mushroomed. As per Bluesky
!nternational Narketing, a US based research
agency, the number is quoted at 1,84S
in mid 1333.
The scene is similar in the US where a recent
Dataquest survey forecasts that the number
of US households banking online will reach
24.2 million by 2004.
!ndian Banking Scenario
private banks and 4 foreign banks
27 public sector banks account for over 84
of the total deposits and over 82 of the
total banking advances in !ndia
Rough estimates assuming teller at Re 1 per
transaction put ATN transaction costs at 4Sp,
phone banking at Sp, debit cards at 20p and
!nternet banking a measly 10p.
Ebanking in !ndia
Narriage of technology and banking is
inevitable to keep pace with changes in the
global scenario.
The erma ommittee recommended the
need for greater use of !T even in the weak
Public sector banks.
Presently Net Banking facility is offered by
!C!C! Bank, Citibank, HDFC Bank, Clobal
Trust Bank etc.
hanging Scenario
urassic banking is pass.
The !nternet is slowly converting retail
banking into a commodity where the
days of loyalty to bricks and mortar
banking are obsolete.
Retention of customers
Survival in competitive markets
Reduction of transaction costs
!ew !nitiatives
HDFC Bank is planning to introduce third party
payments whereby account holders will be in a
position to make payments to predetermined
parties through the Net.
The !C!C! group has also launched an !nternet
payment gateway for handling Net transactions
of its clients.
HSBC is working on a comprehensive interactive
financial services in collaboration with !BN which
would be a stateoftheart local platform.
Relationshi7 Banking
!' enabled Relationshi7
banking
Emphasis on Human Capital"
Customer oriented.
!T enabled Customer relationship
management for banking services.
Naximisation of profitability through the use
of detailed Customer information.
Financial portfolios tailormade to Customer's
individual needs.
'ools sed in Relationshi7
banking
Networking Techniques.
Parallel Systems.
Data Warehousing
Data Nining
Advantages of Relationshi7
Banking
Higher customer retention
Nore cost effective marketing
Reduced Credit risk
Reduced Customer Acquisition costs
stomer Service
ATNs
Personal banking centres
Retail delivery Channels
Home Banking
Telephone Banking
Difficlties
The picture in !ndia, however, is a bit grey.
The RB! does not still allow interbank funds
transfer through the Net since the cyber laws
are still not in place. "nce allowed, this could
pave the way for smooth cash management.
Security also continues to remain a major
issue, especially in the case of corporates, as
bulk transactions are done in a day.
Bankers are aware of the fact reliable
transaction technology as well as
management of the security perceptions of
customers are the keys to success.
Difficlties
The infrastructural costs of providing
such services are quite high.
A bank not only has to automate its
frontend systems which the customer
interfaces with but also the backend
systems so that the bank is able to
provide robust functionality".
!!!'s !nfinity
!nternet Banking Service
As per Mr. K.V.Kamath, MD and CEO ICICI Ltd.,
%echnology today, particularly via the internet, is
creating a platform-independent, low cost
communication infrastructure permeating all sectors
of the economy and providing an affordable
medium to conduct business.
nfinity - nternet Banking Service as launched in
December `97 and has 15,000 customers. It oIIers
you convenient remote banking Iacility. It provides
you an easy and secure access to your accounts ith
us. With just a PC connected to the Internet, you can
have your account inIormation at your Iingertips,
Irom anyhere in the orld, anytime. So, iI you don't
ant brick and mortar bank timings to hassle you,
InIinity Internet banking is just the service Ior you.
nline Services ffered
Account information
Summary of all your Accounts by giving details of each account,
snapshot of balances, available credit lines, record of payments
and transfers.
Allows transaction tracking (retrieval of transaction details
based on cheque number, transaction amount etc)
Provides account statement and transaction reports based on
user defined criteria.
Displays account balance message and also a warning when the
Account balance limit has been crossed.
Allows you to view details of fixed deposits and loan installments
due.
Wunds transfer
%ransfer money between your accounts across any of the
branches
%hird party funds transfer which means you can transfer
money to any other bank holder.
WRequests and intimations
electronically submit a request for :
heque-book
Stop Payment nstruction
pening a ixed Deposit
pening a Recurring Deposit
Wommunication with your account manager
Mail-box facility enables you to send secure mail to your
account manager to find out the status of a request or for
any clarifications.
WPersonalised ontent - InIinity provides
customised content exclusively Ior its users.
- Personal inance containing views of experts
- Select articles on electronic commerce, information
technology
- Lifestyle articles on various places of tourist attraction
- News updates
Wnline investments
Wnline real time e-shopping payments
nline shopping payments at rediff.com, fabmart.com,
malamall.com, magiccart.com, indiainfoline.com, eindia.com,
indbazaar.com, shoppersstop.com, sify.com
WUtility bill payments
Bank has now tied-up with Life nsurance orporation
to accept the payment of life insurance premium over nternet
Payment of Bills of the cellular operators
Which equipment and software do I need to
access Infinity?
f you have a P connected to the nternet, you will be able to use
nfinity. or optimal performance and security, the recommended
browsers are :
WMicrosoft nternet Explorer 4.x or later
WNetscape Navigator 4.x or later
ICICI Bank launched a eb banking service Ior
nonresident Indians (NRIs).
NRIs can no open an account ith the bank on
line by visiting its NRI services section on the
ebsite.
The bank presently has over 15,000 NRI
customers, a majority oI hom are in the United
States, Middle East and Europe.
Thank You